Exhibit 1.1
5,0000,000/1/
POZEN INC.
COMMON STOCK, $0.001 PAR VALUE PER SHARE
UNDERWRITING AGREEMENT
___________________, 2000
U.S. BANCORP XXXXX XXXXXXX INC.
PRUDENTIAL SECURITIES INCORPORATED
PACIFIC GROWTH EQUITIES, INC.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o U.S. Bancorp Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
POZEN Inc., a Delaware corporation (the "Company"), proposes to sell to the
several Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of 5,000,000 shares (the "Firm Shares") of Common Stock, $0.001 par
value per share (the "Common Stock"), of the Company. The Firm Shares consist of
5,000,000 authorized but unissued shares of Common Stock to be issued and sold
by the Company. The Company has also granted to the several Underwriters an
option to purchase up to 750,000 additional shares of Common Stock on the terms
and for the purposes set forth in Section 3 hereof (the "Option Shares"). The
Firm Shares and any Option Shares purchased pursuant to this Underwriting
Agreement (the "Agreement") are herein collectively called the "Securities."
The Company hereby confirms its agreement with respect to the sale of the
Securities to the several Underwriters, for whom you are acting as
Representatives (the "Representatives").
1. REGISTRATION STATEMENT AND PROSPECTUS. A registration statement
on Form S-1 (File No. 333-35930) with respect to the Securities, including a
preliminary form of prospectus, has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the rules and regulations
________________
/1/ Plus an option to purchase up to 750,000 additional shares to cover
over-allotments.
("Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has been filed with the Commission; one or more
amendments to such registration statement have also been so prepared and have
been, or will be, so filed; and, if the Company has elected to rely upon Rule
462(b) of the Rules and Regulations to increase the size of the offering
registered under the Act, the Company will prepare and file with the Commission
a registration statement with respect to such increase pursuant to Rule 462(b).
Copies of such registration statement(s) and amendments and each related
preliminary prospectus have been delivered to you.
If the Company has elected not to rely upon Rule 430A of the Rules and
Regulations, the Company has prepared and will promptly file an amendment to the
registration statement and an amended prospectus (including a term sheet meeting
the requirements of Rule 434 of the Rules and Regulations). If the Company has
elected to rely upon Rule 430A of the Rules and Regulations, it will prepare and
file a prospectus (or a term sheet meeting the requirements of Rule 434)
pursuant to Rule 424(b) that discloses the information previously omitted from
the prospectus in reliance upon Rule 430A. Such registration statement as
amended at the time it is or was declared effective by the Commission, and, in
the event of any amendment thereto after the effective date and prior to the
First Closing Date (as hereinafter defined), such registration statement as so
amended (but only from and after the effectiveness of such amendment), including
a registration statement (if any) filed pursuant to Rule 462(b) of the Rules and
Regulations increasing the size of the offering registered under the Act and
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rules 430A(b) and 434(d) of the Rules and
Regulations, is hereinafter called the "Registration Statement." The prospectus
included in the Registration Statement at the time it is or was declared
effective by the Commission is hereinafter called the "Prospectus," except that
if any prospectus (including any term sheet meeting the requirements of Rule 434
of the Rules and Regulations provided by the Company for use with a prospectus
subject to completion within the meaning of Rule 434 in order to meet the
requirements of Section 10(a) of the Rules and Regulations) filed by the Company
with the Commission pursuant to Rule 424(b) (and Rule 434, if applicable) of the
Rules and Regulations or any other such prospectus provided to the Underwriters
by the Company for use in connection with the offering of the Securities
(whether or not required to be filed by the Company with the Commission pursuant
to Rule 424(b) of the Rules and Regulations) differs from the prospectus on file
at the time the Registration Statement is or was declared effective by the
Commission, the term "Prospectus" shall refer to such differing prospectus
(including any term sheet within the meaning of Rule 434 of the Rules and
Regulations) from and after the time such prospectus is filed with the
Commission or transmitted to the Commission for filing pursuant to such Rule
424(b) (and Rule 434, if applicable) or from and after the time it is first
provided to the Underwriters by the Company for such use. The term "Preliminary
Prospectus" as used herein means any preliminary prospectus included in the
Registration Statement prior to the time it becomes or became effective under
the Act and any prospectus subject to completion as described in Rule 430A or
434 of the Rules and Regulations.
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As part of the offering contemplated by this Agreement, U.S. Bancorp Xxxxx
Xxxxxxx Inc. ("Xxxxx Xxxxxxx") has agreed to reserve out of the Securities set
forth opposite its name on Schedule I to this Agreement up to 250,000 shares for
sale to the Company's employees, officers and directors and other parties
associated with the Company (each a "Participant and, collectively, the
"Participants"), as set forth in the Prospectus under the heading "Underwriting"
(the "Directed Share Program"). The Securities to be sold by Xxxxx Xxxxxxx
pursuant to the Directed Share Program (the "Directed Shares") will be sold by
Xxxxx Xxxxxxx pursuant to this Agreement at the public offering price. Any
Directed Shares not orally confirmed for purchase by any Participants by the end
of the business day on which this Agreement is executed will be offered to the
public by Xxxxx Xxxxxxx as set forth in the Prospectus.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company represents and warrants to, and agrees with, the
several Underwriters as follows:
(i) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission and each Preliminary
Prospectus, at the time of filing thereof, did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; except that the foregoing shall not apply to statements in
or omissions from any Preliminary Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by you,
or by any Underwriter through you, specifically for use in the
preparation thereof.
(ii) As of the time the Registration Statement (or any post-
effective amendment thereto, including a registration statement (if
any) filed pursuant to Rule 462(b) of the Rules and Regulations
increasing the size of the offering registered under the Act) is or
was declared effective by the Commission, upon the filing or first
delivery to the Underwriters of the Prospectus (or any supplement to
the Prospectus (including any term sheet meeting the requirements of
Rule 434 of the Rules and Regulations)) and at the First Closing Date
and Second Closing Date (as hereinafter defined), (A) the Registration
Statement and Prospectus (in each case, as so amended and/or
supplemented) conformed or will conform in all material respects to
the requirements of the Act and the Rules and Regulations, (B) the
Registration Statement (as so amended) did not or will not include an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (C) the Prospectus (as so supplemented)
did not or will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they are or were made, not misleading; except
that the foregoing shall not apply to statements in or omissions from
any such document in reliance upon, and in conformity with, written
information furnished
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to the Company by you, or by any Underwriter through you, specifically
for use in the preparation thereof. If the Registration Statement has
been declared effective by the Commission, no stop order suspending
the effectiveness of the Registration Statement has been issued, and
no proceeding for that purpose has been initiated or, to the Company's
knowledge, threatened by the Commission.
(iii) The financial statements of the Company, together with the
notes thereto, set forth in the Registration Statement and Prospectus
comply in all material respects with the requirements of the Act and
fairly present the financial condition of the Company as of the dates
indicated and the results of operations and changes in cash flows for
the periods therein specified in conformity with generally accepted
accounting principles consistently applied throughout the periods
involved (except as otherwise stated therein); and the supporting
schedules included in the Registration Statement present fairly the
information required to be stated therein. No other financial
statements or schedules are required to be included in the
Registration Statement or Prospectus. Ernst & Young LLP, which has
expressed its opinion with respect to the audited consolidated
financial statements filed as a part of the Registration Statement and
included in the Registration Statement and Prospectus, are independent
public accountants as required by the Act and the Rules and
Regulations.
(iv) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of its jurisdiction
of incorporation. The Company has full corporate power and authority
to own its properties and conduct its business as currently being
carried on and as described in the Registration Statement and
Prospectus, and is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which it owns or
leases real property or in which the conduct of its business makes
such qualification necessary and in which the failure to so qualify
would have a material adverse effect upon its business, condition
(financial or otherwise) or properties taken as a whole.
(v) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, the Company has not incurred any
material liabilities or obligations, direct or contingent, or entered
into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock;
and there has not been any change in the capital stock (other than a
change in the number of outstanding shares of Common Stock due to the
issuance of shares upon the exercise of outstanding options or
warrants, and, as described in the Prospectus, the conversion of
preferred stock into Common Stock and the stock split), or any
material change in the short-term or long-term debt, or any issuance
of options, warrants, convertible securities or other rights to
purchase the capital stock (other than in the ordinary course of
business pursuant to the Company's equity incentive plans disclosed in
the Prospectus and Registration Statement), of the Company, or any
material adverse change, or any
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development involving a prospective material adverse change, in the
general affairs, condition (financial or otherwise), business, key
personnel, property, net worth or results of operations of the
Company.
(vi) Except as set forth in the Prospectus, there is not
pending or, to the knowledge of the Company, threatened or
contemplated, any action, suit or proceeding to which the Company is a
party before or by any court or governmental agency, authority or
body, or any arbitrator, which might result in any material adverse
change in the condition (financial or otherwise), business, net worth
or results of operations of the Company.
(vii) There are no contracts or documents of the Company that
are required to be filed as exhibits to the Registration Statement by
the Act or by the Rules and Regulations that have not been so filed.
(viii) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or
state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting
the rights of creditors generally and subject to general principles of
equity. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, any agreement or instrument to which the Company is a party
or by which it is bound or to which any of its property is subject,
the Company's charter or bylaws, or any order, rule, regulation or
decree of any court or governmental agency or body having jurisdiction
over the Company or any of its properties; no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company or for the consummation by the
Company of the transactions contemplated hereby, including the
issuance or sale of the Securities by the Company, except such as may
be required under the Act or state securities or blue sky laws or in
connection with the review of the offering by the National Association
of Securities Dealers, Inc. (the "NASD"); and the Company has full
power and authority to enter into this Agreement and to authorize,
issue and sell the Securities as contemplated by this Agreement and to
perform the transactions contemplated hereby.
(ix) All of the issued and outstanding shares of capital stock
of the Company, including the outstanding shares of Common Stock and
the outstanding shares of preferred stock of the Company ("Preferred
Stock"), are duly authorized and validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and
applicable state securities laws, were not issued in violation of or
subject to any preemptive rights or other rights to subscribe for or
purchase
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securities, and the holders thereof are not subject to personal
liability by reason of being such holders; the Securities which may be
sold hereunder by the Company have been duly authorized and, when
issued, delivered and paid for in accordance with the terms hereof,
will have been validly issued and will be fully paid and
nonassessable, and the holders thereof will not be subject to personal
liability by reason of being such holders; and the capital stock of
the Company, including the Common Stock, conforms to the description
thereof in the Registration Statement and Prospectus. There are no
preemptive rights or other rights to subscribe for or to purchase, or
any restriction upon the voting or transfer of, any shares of Common
Stock pursuant to the Company's charter, bylaws or any agreement or
other instrument to which the Company is a party or by which the
Company is bound. Neither the filing of the Registration Statement nor
the offering or sale of the Securities as contemplated by this
Agreement gives rise to any rights for or relating to the registration
of any shares of Common Stock or other securities of the Company,
which have not been waived. No transaction has occurred between or
among the Company and any of its officers, directors or five percent
stockholders or any affiliate or affiliates of any such officer,
director or five percent stockholders that is required to be described
in and is not described in or incorporated by reference into the
Registration Statement and Prospectus. Except as described in the
Registration Statement and the Prospectus, there are no options,
warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company any shares of the capital stock
of the Company. The Company has an authorized and outstanding
capitalization as set forth in Prospectus under the heading
"Capitalization."
(x) The Company holds, and is operating in compliance in all
material respects with, all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders of any
governmental or self-regulatory body required for the conduct of its
business (including those required by the U.S. Food and Drug
Administration ("FDA"), the U.S. Nuclear Regulatory Commission and any
federal, state or foreign agencies or bodies engaged in the regulation
of pharmaceuticals or biohazardous substances) and all such
franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and
effect; and the Company is in compliance in all material respects with
all applicable federal, state, local and foreign laws, regulations,
orders and decrees, including without limitation those relating to the
development, testing, manufacturing, sale and distribution of
pharmaceuticals or other products regulated by the FDA or similar
state or foreign government agencies, and relating to the use,
treatment, storage and disposal of toxic substances and the protection
of health or the environment; and the Company has not received any
notice of proceedings relating to the revocation or modification of
any such franchises, grants, authorizations, licenses, permits,
easements, consents, certifications and orders, which singly or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, could result in a material adverse effect on the Company or
its business taken as a whole; and the Company has not received any
notice from any governmental authority or third party alleging a
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breach or violation under any such federal, state, local or foreign
laws, restrictions, orders or decrees.
(xi) In the ordinary course of its business, insofar as is
reasonably practicable and necessary under the circumstances of the
Company's business and operations, the Company periodically considers
the effect of all applicable federal, state, local and foreign laws,
regulations, orders and decrees relating to the use, treatment,
storage and disposal of toxic substances and the protection of health
and the environment on the business operations and properties of the
Company, in the course of which the Company identifies and evaluates,
or would identify and evaluate, associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with such
laws, regulations, orders and decrees, or any permit, license or
approval, any related constraints on operating activities and any
potential liabilities to third parties) and on the basis of such
review or consideration, the Company has reasonably concluded that
such associated costs and liabilities would not, singly or in the
aggregate, have a material adverse effect on the Company or its
business, and, to the Company's knowledge, no facts currently exist
that will require the Company to make future material capital
expenditures to comply with such laws, rules or regulations. No
property which is or has been owned, leased or occupied by the Company
has been designated as a Superfund site pursuant to the Comprehensive
Environment Response, Compensation of Liability Act of 1980, as
amended (42 U.S.C. Section 9601, et. seq.) ("CERCLA") or otherwise
designated as a contaminated site under applicable state or local law.
The Company has not been named as a "potentially responsible party"
under CERCLA.
(xii) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of proceeds
thereof as described in the Prospectus, will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (the "Investment Company Act").
(xiii) The Company, or to the best of the Company's knowledge,
any other person associated with or acting on behalf of the Company
including, without limitation, any director, officer, agent or
employee of the Company, has not, directly or indirectly, while acting
on behalf of the Company (A) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses
relating to political activity; (B) made any unlawful payment to
foreign or domestic government officials or employees or to foreign or
domestic political parties or campaigns from corporate funds; (C)
violated any provision of the Foreign Corrupt Practices Act of 1977,
as amended; or (D) made any other unlawful payment.
(xiv) The Company has good and marketable title to all property
described in the Registration Statement and Prospectus as being owned
by it, in each case free and clear of all liens, claims, security
interests or other
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encumbrances except such as are described in the Registration
Statement and the Prospectus; the property held under lease by the
Company is held by it under valid, subsisting and enforceable leases
with only such exceptions with respect to any particular lease as do
not interfere in any material respect with the conduct of the business
of the Company.
(xv) The Company owns or possesses or has adequate licenses to
use all patents and patent applications and all trademarks, service
marks, tradenames, trademark registrations, service xxxx
registrations, copyrights, licenses, inventions, trade secrets, know-
how and other rights, patentable or unpatentable, necessary for the
conduct of the business of the Company as currently carried on and as
proposed on the date hereof to be carried on, as described in the
Registration Statement and Prospectus (such patents referred to herein
as the "Patents", and such patents, together with all such other
intellectual property referred to herein collectively as the
"Intellectual Property"); except as stated in the Registration
Statement and Prospectus, the Company is not obligated to pay a
royalty, grant a license or otherwise pay any consideration to any
third party in connection with or relative to the Intellectual
Property, nor does any name which the Company uses or any other aspect
of the business of the Company as conducted on the date hereof involve
or give rise to any infringement of, or license or similar fee for,
any patent, patent application, trademark, service xxxx, tradename,
trademark registration, service xxxx registration, copyright, license,
invention, trade secret, know-how or other similar right of others and
the Company has not received any notice alleging any such
infringement. The Company has duly and properly filed or caused to be
filed with the U.S. Patent and Trademark Office (the "PTO") and
applicable foreign and international patent authorities all patent
applications necessary for the conduct of the business of the Company
as currently carried on and as proposed on the date hereof to be
carried on, as described in the Registration Statement and Prospectus
(such patent applications, inclusive of and together with patent
applications in respect of which patents have been issued, are herein
referred to collectively as the "Patent Applications"); in connection
with the filing of the Patent Applications, the Company conducted
reasonable investigations of the published literature and patent
references relating to the inventions claimed in such applications; to
the best of the Company's knowledge, it has complied with the PTO's
duty of candor and disclosure for the Patent Applications and has made
no misrepresentation in the Patent Applications; the Company is not
aware of any facts material to a determination of patentability
regarding the Patent Applications not called to the attention of the
PTO which would preclude the grant of a patent for the Patent
Applications; and the Company has no knowledge of any facts which
would preclude it from having clear title to the Patent Applications.
(xvi) The Company is not in violation of its charter or bylaws
or in breach of or otherwise in default in the performance of any
material obligation, agreement or condition contained in any bond,
debenture, note, indenture, loan agreement or any other material
contract, lease or other instrument to which it is
8
subject or by which it may be bound, or to which any of the material
property or assets of the Company is subject.
(xvii) The Company has filed all federal, state, local and
foreign income and franchise tax returns required to be filed and is
not in default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto, other than
any which the Company is contesting in good faith.
(xviii) No material labor dispute with the employees of the
Company exists, except as described in or contemplated by the
Prospectus, or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could result in any material adverse
effect on the Company or its business taken as a whole.
(xix) The Company has not distributed and will not distribute
any prospectus or other offering material in connection with the
offering and sale of the Securities other than any Preliminary
Prospectus or the Prospectus or other materials permitted by the Act
to be distributed by the Company.
(xx) On the date the Registration Statement became or becomes
effective, the Company's Registration Statement on Form 8-A or other
applicable form under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), became or will become effective.
(xxi) All necessary filings have been made and all filing fees
have been paid to effect the listing of the Securities on the Nasdaq
National Market and the Securities have been duly authorized for
quotation on the NASDAQ National Market.
(xxii) The Company does not own or control any capital stock or
other equity or ownership or proprietary interest in any corporation,
partnership, association, trust or other entity.
(xxiii) The books, records and accounts of the Company accurately
and fairly reflect, in reasonable detail, the transactions in, and
disposition of, the assets of, and the results of operations of, the
Company, and the Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and
(D) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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(xxiv) Other than as contemplated by this Agreement, the Company
has not incurred any liability for any finder's or broker's fee or
agent's commission in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated
hereby.
(xxv) Ernst & Young LLP are, and during the periods covering
their report included in the Registration Statement and Prospectus
were, independent accountants with respect to the Company as required
by the Act. The audited financial statements of the Company (together
with the related notes thereto) included in and incorporated by
reference in the Registration Statement present fairly in all material
respects the financial position and results of operations of the
Company at the respective dates and for the respective periods to
which they apply, subject to normal year-end adjustments. Such
financial statements (together with the related notes thereto) have
been prepared in accordance with generally accepted accounting
principles consistently applied throughout the periods involved.
(xxvi) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
are customary in the businesses in which it is engaged or proposes to
engage after giving effect to the transactions described in the
Prospectus; all policies of insurance and fidelity or surety bonds
insuring the Company or the Company's businesses, assets, employees,
officers and directors are in full force and effect; the Company is in
compliance with the terms of such policies and instruments in all
material respects; the Company has no reason to believe that it will
not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not
have a adverse effect on the Company.
(xxvii) There are no affiliations with the NASD among the
Company's officers, directors or, to the best of the knowledge of the
Company, any stockholder of the Company, except as set forth in the
Registration Statement or otherwise disclosed in writing to the
Representatives.
(xxviii) The Company has not offered, or caused the Underwriters
to offer, Securities to any person pursuant to the Directed Share
Program with the specific intent to unlawfully influence (A) a
customer or supplier of the Company to alter the customer's or
supplier's level or type of business with the Company, or (B) a trade
journalist or publication to write or publish favorable information
about the Company or its products.
(xxix) (A) The Registration Statement on the Effective Date, the
Prospectus as of its date and any Preliminary Prospectus as of its
date comply in all material respects, and any further amendments or
supplements thereto will comply in all material respects, with any
applicable laws or regulations of foreign
10
jurisdictions in which the Prospectus or any Preliminary Prospectus,
as amended or supplemented, if applicable, are distributed in
connection with the Directed Share Program, and (B) no authorization,
approval, consent, license, order, registration or qualification of or
with any government, governmental instrumentality or court, other than
such as have been obtained, is necessary under the securities laws and
regulations of foreign jurisdictions in which the Directed Shares are
offered outside the United States.
(xxx) The Company is not presently doing business with the
government of Cuba or with any person or affiliate located in Cuba.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby.
3. PURCHASE, SALE AND DELIVERY OF SECURITIES.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell 5,000,000 Firm Shares to the several
Underwriters, and each Underwriter agrees, severally and not jointly, to
purchase from the Company the Firm Shares. The purchase price for each Firm
Share shall be $____________________ per share. The obligation of each
Underwriter to the Company shall be to purchase from the Company that number of
Firm Shares (to be adjusted by the Representatives to avoid fractional shares)
which represents the same proportion of the number of Firm Shares to be sold by
the Company pursuant to this Agreement as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto represents to the
total number of Firm Shares to be purchased by all Underwriters pursuant to this
Agreement. In making this Agreement, each Underwriter is contracting severally
and not jointly; except as provided in paragraph (c) of this Section 3 and in
Section 8 hereof, the agreement of each Underwriter is to purchase only the
respective number of Firm Shares specified in Schedule I.
The Firm Shares will be delivered by the Company to you for the
accounts of the several Underwriters against payment of the purchase price
therefor by same day funds payable to the order of the Company, as appropriate,
at the offices of U.S. Bancorp Xxxxx Xxxxxxx, Xxxxx Xxxxxxx Tower, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually
acceptable, at 9:00 a.m. Central time on the third (or if the Securities are
priced, as contemplated by Rule 15c6-1(c) under the Exchange Act, after 4:30
p.m. Eastern time, the fourth) full business day following the date hereof, or
at such other time and date as you and the Company determine pursuant to Rule
15c6-1(a) under the Exchange Act, such time and date of delivery being herein
referred to as the "First Closing Date." If the Representatives so elect,
delivery of the Firm Shares may be made by credit through full fast transfer to
the accounts at The Depository Trust Company designated by the Representatives.
Certificates representing the Firm Shares, in definitive form and in such
denominations and registered in such names as you may request upon at least two
business days' prior notice to the Company, will be made available for checking
and packaging not later than 10:30 a.m., Central time, on the business day next
preceding the First Closing Date at the offices of U.S. Bancorp Xxxxx Xxxxxxx,
Xxxxx Xxxxxxx
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Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such other location as
may be mutually acceptable.
(b) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company hereby grants to the several Underwriters an option to purchase all or
any portion of the Option Shares at the same purchase price as the Firm Shares,
for use solely in covering any over-allotments made by the Underwriters in the
sale and distribution of the Firm Shares. The option granted hereunder may be
exercised at any time (but not more than once) within 30 days after the
effective date of this Agreement upon notice in writing or by telephone
(confirmed in writing) by the Representatives to the Company setting forth the
aggregate number of Option Shares as to which the several Underwriters are
exercising the option, the names and denominations in which the certificates for
the Option Shares are to be registered and the date and time, as determined by
you, when the Option Shares are to be delivered, such time and date being herein
referred to as the "Second Closing" and "Second Closing Date", respectively;
provided, however, that the Second Closing Date shall not be earlier than the
First Closing Date nor earlier than the second business day after the date on
which the option shall have been exercised. The number of Option Shares to be
purchased by each Underwriter shall be the same percentage of the total number
of Option Shares to be purchased by the several Underwriters as the number of
Firm Shares to be purchased by such Underwriter is of the total number of Firm
Shares to be purchased by the several Underwriters, as adjusted by the
Representatives in such manner as the Representatives deem advisable to avoid
fractional shares. No Option Shares shall be sold and delivered unless the Firm
Shares previously have been, or simultaneously are, sold and delivered.
The Option Shares will be delivered by the Company to you for the
accounts of the several Underwriters against payment of the purchase price
therefor by same day funds payable to the order of the Company, at the offices
of U.S. Bancorp Xxxxx Xxxxxxx, Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxxx, Xxxxxxxxx, or such other location as may be mutually acceptable at
9:00 a.m., Central time, on the Second Closing Date. If the Representatives so
elect, delivery of the Option Shares may be made by credit through full fast
transfer to the accounts at The Depository Trust Company designated by the
Representatives. Certificates representing the Option Shares in definitive form
and in such denominations and registered in such names as you have set forth in
your notice of option exercise, will be made available for checking and
packaging not later than 10:30 a.m., Central time, on the business day next
preceding the Second Closing Date at the office of U.S. Bancorp Xxxxx Xxxxxxx,
Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, or such
other location as may be mutually acceptable.
(c) It is understood that you, individually and not as Representatives
of the several Underwriters, may (but shall not be obligated to) make payment to
the Company, on behalf of any Underwriter for the Securities to be purchased by
such Underwriter. Any such payment by you shall not relieve any such Underwriter
of any of its obligations hereunder. Nothing herein contained shall constitute
any of the Underwriters an unincorporated association or partner with the
Company.
12
4. COVENANTS.
(a) The Company covenants and agrees with the several Underwriters as
follows:
(i) If the Registration Statement has not already been declared
effective by the Commission, the Company will use its best efforts to
cause the Registration Statement and any post-effective amendments
thereto to become effective as promptly as possible; the Company will
notify you promptly of the time when the Registration Statement or any
post-effective amendment to the Registration Statement has become
effective or any supplement to the Prospectus (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations) has
been filed and of any request by the Commission for any amendment or
supplement to the Registration Statement or Prospectus or additional
information; if the Company has elected to rely on Rule 430A of the
Rules and Regulations, the Company will prepare and file a Prospectus
(or term sheet within the meaning of Rule 434 of the Rules and
Regulations) containing the information omitted therefrom pursuant to
Rule 430A of the Rules and Regulations with the Commission within the
time period required by, and otherwise in accordance with the
provisions of, Rules 424(b), 430A and 434, if applicable, of the Rules
and Regulations; if the Company has elected to rely upon Rule 462(b)
of the Rules and Regulations to increase the size of the offering
registered under the Act, the Company will prepare and file a
registration statement with respect to such increase with the
Commission within the time period required by, and otherwise in
accordance with the provisions of, Rule 462(b); the Company will
prepare and file with the Commission, promptly upon your request, any
amendments or supplements to the Registration Statement or Prospectus
(including any term sheet within the meaning of Rule 434 of the Rules
and Regulations) that, in your opinion, may be necessary or advisable
in connection with the distribution of the Securities by the
Underwriters; and the Company will not file any amendment or
supplement to the Registration Statement or Prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and
Regulations) to which you shall reasonably object by notice to the
Company after having been furnished a copy a reasonable time prior to
the filing.
(ii) The Company will advise you, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration
Statement, of the suspension of the qualification of the Securities
for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose; and the Company
will promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such a stop order should be
issued.
13
(iii) Within the time during which a prospectus (including any
term sheet within the meaning of Rule 434 of the Rules and
Regulations) relating to the Securities is required to be delivered
under the Act, the Company will comply as far as it is able with all
requirements imposed upon it by the Act, as now and hereafter amended,
and by the Rules and Regulations, as from time to time in force, so
far as necessary to permit the continuance of sales of or dealings in
the Securities as contemplated by the provisions hereof and the
Prospectus. If during such period any event occurs as a result of
which the Prospectus would include an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Prospectus to comply with the
Act, the Company will promptly notify you and will amend the
Registration Statement or supplement the Prospectus (at the expense of
the Company) so as to correct such statement or omission or effect
such compliance.
(iv) The Company will use its best efforts to qualify the
Securities for sale under the securities laws of such jurisdictions as
you reasonably designate and to continue such qualifications in effect
so long as required for the distribution of the Securities, except
that the Company shall not be required in connection therewith to
qualify as a foreign corporation or to execute a general consent to
service of process in any state.
(v) The Company will furnish to the Underwriters copies of the
Registration Statement (one of which will be signed and will include
all exhibits), each Preliminary Prospectus, the Prospectus, and all
amendments and supplements (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations) to such documents,
in each case as soon as available and in such quantities as you may
from time to time reasonably request.
(vi) During a period of five years commencing with the date
hereof, the Company will furnish to the Representatives, and to each
Underwriter who may so request in writing, copies of all periodic and
special reports furnished to the stockholders of the Company and all
information, documents and reports filed with the Commission, the
NASD, or any securities exchange.
(vii) The Company will make generally available to its security
holders as soon as practicable, but in any event not later than 15
months after the end of the Company's current fiscal quarter, an
earnings statement (which need not be audited) covering a 12-month
period beginning after the effective date of the Registration
Statement that shall satisfy the provisions of Section 11(a) of the
Act and Rule 158 of the Rules and Regulations.
(viii) The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming
effective under the provisions of Section 9(a) hereof or is
terminated, will pay or
14
cause to be paid, upon receipt of a reasonably detailed accounting,
(A) all expenses (including transfer taxes allocated to the respective
transferees) incurred in connection with the delivery to the
Underwriters of the Securities, (B) all expenses and fees (including,
without limitation, fees and expenses of the Company's accountants and
counsel but, except as otherwise provided below, not including fees of
the Underwriters' counsel) in connection with the preparation,
printing, filing, delivery, and shipping of the Registration Statement
(including the financial statements therein and all amendments,
schedules, and exhibits thereto), the Securities, each Preliminary
Prospectus, the Prospectus, and any amendment thereof or supplement
thereto, and the printing, delivery, and shipping of this Agreement
and other underwriting documents, including Blue Sky Memoranda, (C)
all filing fees and fees and disbursements of the Underwriters'
counsel incurred in connection with the qualification of the
Securities for offering and sale by the Underwriters or by dealers
under the securities or blue sky laws of the states and other
jurisdictions which you shall designate in accordance with Section
4(d) hereof, (D) the fees and expenses of any transfer agent or
registrar, (E) the filing fees and fees and expenses of the
Underwriters' counsel incident to any required review by the NASD of
the terms of the sale of the Securities, (F) listing fees, if any, (G)
all fees and disbursements of special or local counsel incurred by the
Underwriters in connection with the Directed Share Program and stamp
duties, similar taxes or duties or other taxes, if any, incurred by
the Underwriters in connection with the Directed Share Program, (H)
all costs and expenses incurred in connection with attendance at any
meetings with prospective investors in the Securities (other than
shall have been specifically approved by the Representatives to be
paid for by the Underwriters), and (I) all other costs and expenses
incident to the performance of its obligations hereunder that are not
otherwise specifically provided for herein. If the sale of the
Securities provided for herein is not consummated by reason of action
by the Company pursuant to Section 9(a) hereof which prevents this
Agreement from becoming effective, or by reason of any failure,
refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition
of the Underwriters' obligations hereunder required to be fulfilled by
the Company is not fulfilled, upon receipt of a reasonably detailed
accounting, the Company will reimburse the several Underwriters for
all out-of-pocket disbursements (including fees and disbursements of
counsel) incurred by the Underwriters in connection with their
investigation, preparing to market and marketing the Securities or in
contemplation of performing their obligations hereunder. The Company
shall not in any event be liable to any of the Underwriters for loss
of anticipated profits from the transactions covered by this
Agreement.
(ix) The Company will apply the net proceeds from the sale of the
Securities to be sold by it hereunder for the purposes set forth in
the Prospectus and will file such reports with the Commission with
respect to the sale of the Securities and the application of the
proceeds therefrom as may be required in accordance with Rule 463 of
the Rules and Regulations.
15
(x) The Company will not, without your prior written consent,
offer for sale, sell, contract to sell, grant any option for the sale
of or otherwise issue or dispose of any Common Stock or any securities
convertible into or exchangeable for, or any options or rights to
purchase or acquire, Common Stock, except to the Underwriters pursuant
to this Agreement, upon the exercise of any warrants outstanding as of
the date hereof and described in the Prospectus, or in the ordinary
course of business pursuant to the Company's equity incentive plans
disclosed in the Prospectus, for a period of 180 days after the
commencement of the public offering of the Securities by the
Underwriters.
(xi) The Company either has caused to be delivered to you or will
cause to be delivered to you prior to the effective date of the
Registration Statement a letter from each of the Company's directors
and officers and holders of substantially all (and in any event at
least 95%) of the Company's Common Stock and/or Preferred Stock prior
to the offering, stating that such person agrees that he or she will
not, without your prior written consent, offer for sale, sell,
contract to sell or otherwise dispose of any shares of Common Stock,
any securities convertible or exchangeable for Common Stock (including
Preferred Stock) or rights to purchase Common Stock or securities
convertible or exchangeable for Common Stock, for a period of 180 days
after commencement of the public offering of the Securities by the
Underwriters.
(xii) The Company will not take, directly or indirectly, any
action designed to or which might reasonably be expected to cause or
result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities, and has not effected any sales of Common Stock which are
required to be disclosed in response to Item 701 of Regulations S-K
under the Act which have not been so disclosed in the Registration
Statement.
(xiii) Except as contemplated by this Agreement, the Company
will not incur any liability for any finder's or broker's fee or
agent's commission in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated
hereby.
(xiv) The Company will inform the Florida Department of Banking
and Finance at any time prior to the consummation of the distribution
of the Securities by the Underwriters if it commences engaging in
business with the government of Cuba or with any person or affiliate
located in Cuba. Such information will be provided within 90 days
after the commencement thereof or after a change occurs with respect
to previously reported information.
(xv) In connection with the Directed Share Program, the Company
will ensure that the Directed Shares will be restricted, to the extent
required by the NASD or the NASD rules, from sale, transfer,
assignment, pledge or
16
hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. Xxxxx Xxxxxxx will notify
the Company as to which Participants will need to be so restricted.
The Company will direct the transfer agent to place stop transfer
restrictions upon such securities for such period of time.
(xvi) The Company will comply with all applicable securities and
other applicable laws, rules and regulations in each foreign
jurisdiction in which the Directed Shares are offered in connection
with the Directed Share Program.
(xvii) If at any time during the 25-day period after the
Registration Statement becomes effective or the period prior to the
Second Closing Date, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which in your opinion
the market price of the Common Stock has been or is likely to be
materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus),
the Company will, after notice from you advising the Company to the
effect set forth above, forthwith prepare, consult with you concerning
the substance of, and disseminate a press release or other public
statement, reasonably satisfactory to you, responding to or commenting
on such rumor, publication or event.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of the
several Underwriters hereunder are subject to the accuracy, as of the date
hereof and at each of the First Closing Date and the Second Closing Date (as if
made at such Closing Date), of and compliance with all representations,
warranties and agreements of the Company contained herein, to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
(a) The Registration Statement shall have become effective not later
than 5:00 p.m., Central time, on the date of this Agreement, or such later time
and date as you, as Representatives of the several Underwriters, shall approve
and all filings required by Rules 424, 430A and 434 of the Rules and Regulations
shall have been timely made; no stop order suspending the effectiveness of the
Registration Statement or any amendment thereof shall have been issued; no
proceedings for the issuance of such an order shall have been initiated or
threatened; and any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with to your satisfaction.
(b) No Underwriter shall have advised the Company that the
Registration Statement or the Prospectus, or any amendment thereof or supplement
thereto (including any term sheet within the meaning of Rule 434 of the Rules
and Regulations), contains an untrue statement of fact which, in your opinion,
is material, or omits to state a fact which, in your opinion, is material and is
required to be stated therein or necessary to make the statements therein not
misleading.
(c) Except as contemplated in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus, the
17
Company shall not have incurred any material liabilities or obligations, direct
or contingent, or entered into any material transactions, or declared or paid
any dividends or made any distribution of any kind with respect to its capital
stock; and there shall not have been any change in the capital stock (other than
a change in the number of outstanding shares of Common Stock due to the issuance
of shares upon the exercise of outstanding options or warrants), or any material
change in the short-term or long-term debt of the Company, or any issuance of
options, warrants, convertible securities or other rights to purchase the
capital stock of the Company or any of its subsidiaries, or any material adverse
change or any development involving a prospective material adverse change
(whether or not arising in the ordinary course of business and including without
limitation any loss or interference with its business or properties from fire,
flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or legal or governmental proceeding) in
the, or any event which has, or any development which might have, a material
adverse effect upon the Company or the,, general affairs, condition (financial
or otherwise), business, key personnel, property, net worth, results of
operations or prospects of the Company (including without limitation a change in
management or control of the Company), that, in your judgment, makes it
impractical or inadvisable to offer or deliver the Securities on the terms and
in the manner contemplated in the Prospectus.
(d) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of Xxxxxx, Xxxxx &
Bockius LLP, counsel for the Company, dated such Closing Date and addressed to
you (and stating that it may be relied upon by counsel to the Underwriters), to
the effect that:
(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware. The Company has full corporate power and authority to own
its properties and conduct its business as currently being carried on
and as described in the Registration Statement and Prospectus, and the
Company is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which it owns or leases
property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would
have a material adverse effect upon its business condition (financial
or otherwise) or properties.
(ii) The capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under
the caption "Description of Capital Stock." All of the issued and
outstanding shares of Series F Convertible Preferred Stock of the
Company have been duly authorized and validly issued in accordance
with all applicable federal and state securities laws and are fully
paid and nonassessable, and the holders thereof are not subject to
personal liability by reason of being such holders. The Company has
the authorized and outstanding capitalization as set forth in the
Prospectus under the heading "Capitalization;" and the certificates
evidencing the securities are in due and proper legal form and have
been duly authorized for issuance by the Company; none of the
outstanding shares of capital stock of the Company were issued in
violation of any preemptive or similar right arising under the charter
or bylaws of the Company or applicable law, or under any instrument or
agreement known to such counsel to which the
18
Company is a party or by which the Company is bound. The Securities to
be issued and sold by the Company hereunder have been duly authorized
and, when issued, delivered and paid for in accordance with the terms
of this Agreement, will have been validly issued and will be fully
paid and nonassessable, and none of the Securities will be issued in
violation of any preemptive or similar right arising under the charter
or bylaws of the Company or applicable law, or under any instrument or
agreement known to such counsel to which the Company is a party or by
which the Company is bound, and the holders thereof will not be
subject to personal liability by reason of being such holders. Except
as otherwise stated in the Registration Statement and Prospectus,
there are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of, any
shares of Common Stock pursuant to the Company's charter, bylaws or
any agreement or other instrument known to such counsel to which the
Company is a party or by which the Company is bound. To the best of
such counsel's knowledge, neither the filing of the Registration
Statement nor the offering or sale of the Securities as contemplated
by this Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of the
Company, except those rights which have been waived.
(iii) To the best of such counsel's knowledge, except as
described in the Registration Statement and Prospectus, there are no
options, warrants, agreements, contracts or other rights in existence
to purchase or acquire from the Company any shares of the capital
stock of the Company. To the best of such counsel's knowledge, the
description of the Company's stock option and any other stock plans or
arrangements, and the other rights granted or exercised thereunder,
set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans,
arrangements, options and rights.
(iv) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of such counsel, threatened by the
Commission.
(v) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents fairly present in all material respects the
information required to be shown; and such counsel does not know of
any statutes or legal or governmental proceedings required to be
described in the Prospectus that are not described as required, or of
any contracts or documents of a character required to be described in
the Registration Statement or Prospectus or included as exhibits to
the Registration Statement that are not described or included as
required.
(vi) The Company has all requisite corporate power and authority
to enter into, deliver and perform this Agreement, and issue and sell
the Securities, and this Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid, legal and
binding obligation of the Company
19
enforceable in accordance with its terms (except as rights to
indemnity hereunder may be limited by federal or state securities laws
and except as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity); the
execution, delivery and performance of this Agreement by the Company
and the consummation by the Company of the transactions herein
contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute,
rule or regulation, any agreement or instrument known to such counsel
to which the Company is a party or by which it is bound or to which
any of its property is subject, the Company's charter or bylaws, or
any order or decree known to such counsel of any court or governmental
agency or body having jurisdiction over the Company or any of its
respective properties; and no consent, approval, authorization or
order of, or filing with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement
by the Company or for the consummation by the Company of the
transactions contemplated hereby, including the issuance or sale of
the Securities by the Company, except such as have been obtained,
state securities laws and in connection with the review and clearance
of the offering with the NASD.
(vii) To the best of such counsel's knowledge, the Company holds
and is operating in compliance in all material respects with, all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any governmental or self-
regulatory body required for the conduct of its business and all such
franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and
effect.
(viii) To the best of such counsel's knowledge, the Company is
not in violation of its charter or bylaws. To the best of such
counsel's knowledge, the Company is not in breach of or otherwise in
default, and no event has occurred which with notice or lapse of time,
or both, would constitute a default, in the due performance and
observance of any material obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement or
any other material contract, lease or other instrument to which it is
subject or by which it may be bound, or to which any of the material
property or assets of the Company is subject.
(ix) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending or
threatened against, or involving the assets, properties or businesses
of, the Company which would have a material adverse effect upon the
Company or its business, condition (financial or otherwise) or
properties.
(x) The statements in the Prospectus under the captions
"Description of Capital Stock," and "Certain Relationships and
Related Transactions," insofar
20
as such statements constitute a summary of documents referred to
therein or matters of law, are fair summaries in all material respects
and accurately present the information called for with respect to such
documents and matters. Accurate copies of all contracts and other
documents known to such counsel and required to be filed as exhibits
to, or described in, the Registration Statement have been so filed
with the Commission or are fairly described in the Registration
Statement, as the case may be.
(xi) The offering, sale and delivery of shares of Series F
Convertible Preferred Stock by the Company in August 2000, and the
issuance and delivery on or about the effective time of the offering
of the Securities pursuant to the Registration Statement of shares
upon conversion or otherwise in respect of the Series F Convertible
Preferred Stock, and upon conversion or otherwise in respect of the
issued and outstanding shares of Series E Convertible Preferred Stock
issued by the Company in March 2000, , was exempt from the
registration requirements of the Securities Act; and neither the
offering, sale or delivery of the Securities, nor the offering, sale
or delivery of the Series F Convertible Preferred Stock, nor the
issuance and delivery of shares upon the conversion or otherwise in
respect of the Series F Convertible Preferred Stock, or upon the
conversion or otherwise in respect of the issued and outstanding
shares of Series E Convertible Preferred Stock, had, has or will have
any legal effect upon any determination that the offering, sale and
delivery of the shares of Series E Convertible Preferred Stock was
exempt from registration under the Act; and neither the offering,
issuance and sale of the Series F Convertible Preferred Stock, nor
the issuance and delivery of shares upon the conversion or otherwise
in respect thereof, nor the offering, issuance and sale of the
Securities, has been, is or will be integrated with the offering, sale
or delivery of the Series E Convertible Preferred Stock.
(xii) The Securities have been approved for listing on the
Nasdaq National Market.
(xiii) The Company is not an "investment company" or an entity
controlled by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xiv) The Registration Statement, all preliminary prospectuses
and the Prospectus, and any amendment thereof or supplement thereto
(including any term sheet within the meaning of Rule 434 of the Rules
and Regulations, but excepting the financial statements and schedules
and other financial and statistical data included therein, as to which
such counsel expresses no opinion), comply as to form in all material
respects with the requirements of the Act and the Rules and
Regulations.
(xv) The statements of federal law or regulation contained in
the Prospectus under the captions "Business - Government Regulation",
"Risk Factors - If we, or our collaborators, do not obtain and
maintain required regulatory
21
approval, we will be unable to commercialize our product candidates"
and - "We need to conduct preclinical, toxicology and carcinogenicity
studies and clinical trials of all of our product candidates. Any
unanticipated costs or delays in these studies or trials, or the need
to conduct additional trials, could reduce our revenue and
profitability", and other references in the Registration Statement and
Prospectus to United States Food and Drug Administration law and
regulation are, in all material respects, correct and accurate
statements or summaries of applicable United States Food and Drug
Administration law and regulation, and fairly present the information
disclosed therein.
(xvi) The Company's business, as currently conducted and as
described in the Registration Statement and Prospectus, does not, to
the best of such counsel's knowledge, violate the FFDC Act or any FDA
rule or regulation and, to the best of such counsel's knowledge, there
are no FDA or judicial administration proceedings pending or
threatened against the Company.
In addition, such counsel shall state that in the course of the
preparation of the Registration Statement and the Prospectus, such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent accountants of the Company,
representatives of the Underwriters and representatives of counsel for the
Underwriters, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and at which such counsel inquired
of the representatives of the Company as to the materiality of the facts
disclosed to such counsel and, although such counsel does not pass upon, and
does not assume any responsibility for, the accuracy, completeness or fairness
of any statement contained in the Registration Statement or the Prospectus and
such counsel has made no independent check or verification thereof, based in
part upon the foregoing, (relying as to materiality to a large extent upon the
officers and representatives of the Company), no facts have come to such
counsel's attention that have led such counsel to believe that the Registration
Statement (except as to the financial statements and notes thereto and other
financial and statistical data included therein as to which such counsel need
not express any opinion or belief), as of the date of effectiveness contained an
untrue statement of material fact or omitted to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading or that the Prospectus (except as to the financial statements and the
notes thereto and other financial data included therein or excluded therefrom as
to which such counsel need not express any opinion or belief), as of its date or
as of the date of such opinion, contained or contains an untrue statement of
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. It is understood and agreed that other counsel to the
Company is rendering opinions with respect to the sections of the Prospectus
entitled "Risk Factors - Risks Related to Our Business - If we are unable to
protect our patents or proprietary rights, or if we are unable to operate our
business without infringing the patents and proprietary rights of others, we may
be unable to develop our product candidates or compete effectively" and
"Business - Patents and Proprietary Information", and that no opinions need be
expressed by such counsel with respect to such sections or matters.
22
In rendering any such opinion, such counsel may state that such
counsel (i) expresses no opinion as to the laws of any jurisdiction other than
the laws of the State of Delaware and the federal laws of the United States and
(ii) has assumed, without independent verification, that the laws of the State
of Minnesota are identical in all respects to the laws of the State of Delaware
, noting that the laws of the State of Minnesota are likely to differ from the
laws of the State of Delaware with respect to the matters covered by such
counsel's opinion, that even if such laws were the same as the laws of the State
of Delaware, judicial interpretations thereto in Minnesota may differ from
judicial interpretations by Delaware courts and that such differences may be
material.
In rendering such opinion such counsel may rely (i) as to matters of
law other than Delaware and federal law, upon the opinion or opinions of local
counsel provided that the extent of such reliance is specified in such opinion
and that such counsel shall state that although such counsel is not admitted to
practice law in such jurisdiction, it has no reason to believe that they and you
are not entitled to rely on such opinion and (ii) as to matters of fact, to the
extent such counsel deems reasonable upon certificates of public officials and
officers of the Company, provided that the extent of such reliance is specified
in such opinion.
(e) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of Xxxxxxxxx & Xxxxx,
PLLC, counsel for the Company, dated such Closing Date and addressed to you (and
stating that it may be relied upon by counsel to the Underwriters), to the
effect that:
(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware. The Company has full corporate power and authority to own
its properties and conduct its business as currently being carried on
and as described in the Registration Statement and Prospectus, and the
Company is duly qualified to do business as a foreign corporation and
is in good standing in each jurisdiction in which it owns or leases
property or in which the conduct of its business makes such
qualification necessary and in which the failure to so qualify would
have a material adverse effect upon its business condition (financial
or otherwise) or properties.
(ii) The capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus under
the caption "Description of Capital Stock." All of the issued and
outstanding shares of the capital stock of the Company have been duly
authorized and validly issued in accordance with all applicable
federal and state securities laws and are fully paid and
nonassessable, and the holders thereof are not subject to personal
liability by reason of being such holders. The Company has the
authorized and outstanding capitalization as set forth in the
Prospectus under the heading "Capitalization;" and the certificates
evidencing the securities are in due and proper legal form and have
been duly authorized for issuance by the Company; none of the
outstanding shares of capital stock of the Company were issued in
violation of any preemptive or similar right. The Securities to be
issued and sold by the Company hereunder have been duly authorized
and, when issued, delivered and paid for in accordance with the terms
23
of this Agreement, will have been validly issued and will be fully
paid and nonassessable, and none of the Securities will be issued in
violation of any preemptive or similar right, and the holders thereof
will not be subject to personal liability by reason of being such
holders. Except as otherwise stated in the Registration Statement and
Prospectus, there are no preemptive rights or other rights to
subscribe for or to purchase, or any restriction upon the voting or
transfer of, any shares of Common Stock pursuant to the Company's
charter, bylaws or any agreement or other instrument known to such
counsel to which the Company is a party or by which the Company is
bound. To the best of such counsel's knowledge, neither the filing of
the Registration Statement nor the offering or sale of the Securities
as contemplated by this Agreement gives rise to any rights for or
relating to the registration of any shares of Common Stock or other
securities of the Company, except those rights which have been waived.
(iii) To the best of such counsel's knowledge, except as
described in the Registration Statement and Prospectus, there are no
options, warrants, agreements, contracts or other rights in existence
to purchase or acquire from the Company any shares of the capital
stock of the Company. The description of the Company's stock option
and any other stock plans or arrangements, and the other rights
granted or exercised thereunder, set forth in the Prospectus
accurately and fairly presents the information required to be shown
with respect to such plans, arrangements, options and rights.
(iv) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, contracts
and other documents fairly present in all material respects the
information required to be shown; and such counsel does not know of
any statutes or legal or governmental proceedings required to be
described in the Prospectus that are not described as required, or of
any contracts or documents of a character required to be described in
the Registration Statement or Prospectus or included as exhibits to
the Registration Statement that are not described or included as
required.
(v) The Company has all requisite corporate power and authority
to enter into, deliver and perform this Agreement, and issue and sell
the Securities, and this Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid, legal and
binding obligation of the Company enforceable in accordance with its
terms (except as rights to indemnity hereunder may be limited by
federal or state securities laws and except as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws
affecting the rights of creditors generally and subject to general
principles of equity); the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the
transactions herein contemplated will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, rule or regulation, any agreement or
instrument known to such counsel to which the Company is a party or by
which it is bound or to which any of its property is subject, the
Company's charter or bylaws, or any order or decree known to such
counsel of any court or
24
governmental agency or body having jurisdiction over the Company or
any of its respective properties; and no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company or for the consummation by the
Company of the transactions contemplated hereby, including the
issuance or sale of the Securities by the Company, except such as have
been obtained, state securities laws, and in connection with the
review and clearance of the offering with the NASD.
(vi) To the best of such counsel's knowledge, the Company holds
and is operating in compliance in all material respects with, all
franchises, grants, authorizations, licenses, permits, easements,
consents, certificates and orders of any governmental or self-
regulatory body required for the conduct of its business and all such
franchises, grants, authorizations, licenses, permits, easements,
consents, certifications and orders are valid and in full force and
effect.
(vii) To the best of such counsel's knowledge, the Company is
not in violation of its charter or bylaws. To the best of such
counsel's knowledge, the Company is not in breach of or otherwise in
default, and no event has occurred which with notice or lapse of time,
or both, would constitute a default, in the due performance and
observance of any material obligation, agreement or condition
contained in any bond, debenture, note, indenture, loan agreement or
any other material contract, lease or other instrument to which it is
subject or by which it may be bound, or to which any of the material
property or assets of the Company is subject.
(viii) To the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation,
before any court or before or by any public body or board pending or
threatened against, or involving the assets, properties or businesses
of, the Company which would have a material adverse effect upon the
Company or its business, condition (financial or otherwise) or
properties.
(ix) The statements in the Prospectus under the captions
"Description of Capital Stock," "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and
Capital Resources" and "Certain Relationships and Related
Transactions," insofar as such statements constitute a summary of
documents referred to therein or matters of law, are fair summaries in
all material respects and accurately present the information called
for with respect to such documents and matters. Accurate copies of
all contracts and other documents required to be filed as exhibits to,
or described in, the Registration Statement have been so filed with
the Commission or are fairly described in the Registration Statement,
as the case may be.
(x) The offering, sale and delivery of shares of Series E
Convertible Preferred Stock by the Company in March 2000, and of
Series F Convertible
25
Preferred Stock by the Company in August 2000, and the issuance of
shares of common stock upon the conversion or otherwise in respect
thereof on or about the effective time of the offering of the
Securities pursuant to the Registration Statement, was exempt from the
registration requirements of the Securities Act.
(xi) To the best of such counsel's knowledge, there are no FDA or
judicial administration proceedings pending or threatened against the
Company.
In addition, such counsel shall state that in the course of the
preparation of the Registration Statement and the Prospectus, such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent accountants of the Company,
representatives of the Underwriters and representatives of counsel for the
Underwriters, at which the contents of the Registration Statement and the
Prospectus and related matters were discussed and at which such counsel inquired
of the representatives of the Company as to the materiality of the facts
disclosed to such counsel and, although such counsel does not pass upon, and
does not assume any responsibility for, the accuracy, completeness or fairness
of any statement contained in the Registration Statement or the Prospectus and
such counsel has made no independent check or verification thereof, based in
part upon the foregoing, (relying as to materiality to a large extent upon the
officers and representatives of the Company), no facts have come to such
counsel's attention that have led such counsel to believe that the Registration
Statement (except as to the financial statements and notes thereto and other
financial and statistical data included therein as to which such counsel need
not express any opinion or belief), as of the date of effectiveness contained an
untrue statement of material fact or omitted to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading or that the Prospectus (except as to the financial statements and the
notes thereto and other financial data included therein or excluded therefrom as
to which such counsel need not express any opinion or belief), as of its date or
as of the date of such opinion, contained or contains an untrue statement of
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. It is understood and agreed that other counsel to the
Company is rendering opinions with respect to the sections of the Prospectus
entitled "Risk Factors - Risks Related to Our Business --If we are unable to
protect our patents or proprietary rights, or if we are unable to operate our
business without infringing the patents and proprietary rights of others, we may
be unable to develop our product candidates or compete effectively" and
"Business - Patents and Proprietary Information", and that no opinions need be
expressed by such counsel with respect to such sections or matters.
In rendering any such opinion, such counsel may state that such
counsel (i) expresses no opinion as to the laws of any jurisdiction other than
the laws of the State of North Carolina, the Delaware General Corporation Law
and the federal laws of the United States and (ii) has assumed, without
independent verification, that the laws of the State of Minnesota are identical
in all respects to the laws of the State of North Carolina, noting that the laws
of the State of Minnesota are likely to differ from the laws of the State of
North Carolina with respect to the matters covered by such counsel's opinion,
that even if such laws were the same as the laws of the State of North Carolina,
judicial interpretations thereto in Minnesota may differ from judicial
interpretations by North Carolina courts and that such differences may be
material.
26
In rendering such opinion such counsel may rely (i) as to matters of
law other than North Carolina, Delaware and federal law, upon the opinion or
opinions of local counsel provided that the extent of such reliance is specified
in such opinion and that such counsel shall state that although such counsel is
not admitted to practice law in such jurisdiction, it has no reason to believe
that they and you are not entitled to rely on such opinion and (ii) as to
matters of fact, to the extent such counsel deems reasonable upon certificates
of public officials and officers of the Company, provided that the extent of
such reliance is specified in such opinion.
(f) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, the opinion of Pillsbury Madison &
Sutro, LLP dated such Closing Date and addressed to you (and stating that it may
be relied upon by counsel to the Underwriters), to the effect that:
(i) Such counsel represents the Company in matters relating to
intellectual property, including patents, and is familiar with the
technology used by the Company in its business and the manner of its
use and has read the portions of the Registration Statement and the
Prospectus entitled "Business - Patents and Proprietary Information"
and "Risk Factors - Risks Related to Our Business - If we are unable
to protect our patent or proprietary rights, or if we are unable to
operate our business without infringing the patents and proprietary
rights of others, we may be unable to develop our products or compete
effectively" (collectively, the "Patent Language").
(ii) The Patent Language contains accurate descriptions of the
Patents and the pending Patent Applications, and of the patents
licensed to the Company, and the statements in the Patent Language,
insofar as such statements constitute summaries of the statutes,
regulations, rules, legal matters, documents or proceedings referred
to therein, fairly present the information called for with respect to
such statutes, regulations, rules, legal matters, documents and
proceedings and fairly summarize the matters referred to therein.
(iii) Such counsel has reviewed the Patent Applications filed by
the Company in the United States and outside the United States and in
the opinion of such counsel, the Company's United States Patent
Applications have been properly prepared and filed on behalf of the
Company; and to such counsel's knowledge, the Company's Patent
Applications filed outside the United States have also been properly
prepared and filed; and the Company is presently diligently pursuing
those Patent Applications in respect of which patents have not yet
been issued and which relate to the business or operations of the
Company as currently conducted or proposed to be conducted as
described in the Prospectus and Registration Statement,; and the
Patent Applications (including those that have issued) and the
inventions described in the Company's Patent Applications are assigned
or, insofar as stated un the Prospectus, licensed, to the Company; to
such counsel's knowledge, no other entity or individual has any right
or claim in any of the Patent Applications, or any issued patent
(including the Patents), and
27
in such counsel's opinion each of the Company's Patents and Patent
Applications discloses patentable subject matter; to such counsel's
knowledge, except as described in the Prospectus, there are no legal
or governmental proceedings pending (other than those related to
prosecution by the Company of Patent Applications) relating to the
Company, the claimed inventions of the Patents or the other
Intellectual Property and no such material proceedings are threatened
or contemplated by governmental authorities or others.
(iv) To such counsel's knowledge, except for those Patents or
Patent Applications described in the Registration Statement and
Prospectus as having been licensed to the Company, in respect of which
there are no facts which would preclude the Company from having valid
license rights, there are no facts which would preclude the Company
from having valid license rights or clear title to the Patents or
Patent Applications (inclusive of all patents issued or issuable
pursuant thereto), and based upon a search of the appropriate records
of the PTO commissioned by such counsel, and upon representations by
the Company that no interests have been conveyed to third parties
which have not been recorded in the PTO, the Company has clear record
title to the Company's Patents and Patent Applications free and clear
of any liens or encumbrances, except for those Patents or Patent
Applications described in the Registration Statement and Prospectus as
having been licensed to the Company, to which the Company has valid
license rights, free and clear of any liens or encumbrances, and the
terms and obligations of the Company under each such license are
accurately described in the Registration Statement and Prospectus.
(v) The Company has complied with the PTO duty of candor and
disclosure for each of the Patents and Patent Applications, and such
counsel has no knowledge that the Company lacks or will be unable to
obtain any rights or licenses to use all Intellectual Property
necessary for the conduct of its business as now proposed to be
conducted by the Company as described in the Prospectus.
(vi) Such counsel has no knowledge of any facts material to a
determination of patentability regarding the Company's Patents or
Patent Applications not called to the attention of the PTO that would
constitute a breach of the Company's duty of candor or disclosure, and
is unaware of any facts not called to the attention of the PTO which
would preclude the grant of a patent for those of the Company's Patent
Applications in respect of which no patent has yet been issued.
(vii) There is presently no valid basis for a finding of
unenforceability or invalidity of any Intellectual Property, and
such counsel has not received , nor has the Company advised such
counsel that it has received, any notice of infringement of or
conflict with rights or claims of others with respect to the Patents,
the Patent Applications or the other Intellectual Property owned or
used by the Company.
28
(viii) Such counsel has no knowledge of any patent rights of
others which are or would be infringed by specific products or
processes referred to in the Prospectus, which infringement, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in any material adverse effect on the condition,
financial or otherwise, or in the earnings, business, operations or
prospects of the Company.
(ix) Such counsel (A) has no reason to believe that the Patent
Language contained in the Registration Statement and the Prospectus
included therein at the time the Registration Statement became
effective contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (B) has no reason to
believe that the Patent Language contained in the Prospectus contains
any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(g) On each Closing Date, there shall have been furnished to you, as
Representatives of the several Underwriters, such opinion or opinions from
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, counsel for the several Underwriters,
dated such Closing Date and addressed to you, with respect to the formation of
the Company, the validity of the Securities, the Registration Statement, the
Prospectus and other related matters as you reasonably may request, and such
counsel shall have received such papers and information as they request to
enable them to pass upon such matters.
(h) You, as Representatives of the several Underwriters, shall have
received from Ernst & Young LLP, a letter or letters dated, respectively, the
date hereof and each such Closing Date, and addressed to you, in form and
substance satisfactory to the Representatives, to the effect that:
(i) they are independent public accountants with respect to
the Company within the meaning of the Act and are in compliance with the
applicable requirements relating to the qualifications of accountants under the
applicable rules and regulations thereunder adopted by the Commission;
(ii) in their opinion, the financial statements and schedules
audited by them and included in the Registration Statement and the Prospectus
(including those incorporated therein by reference) comply in form and in all
material respects with the applicable accounting requirements of the Act and the
related published rules and regulations;
(iii) on the basis of a reading of the latest available interim
unaudited financial statements of the Company, carrying out certain specified
procedures that would not necessarily reveal matters of significance with
respect to the comments set forth in this paragraph (iii), a reading of the
minute books of the stockholders, the board of directors and any committees
thereof of the Company, and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters, nothing came to their
attention that caused them to believe that:
29
(A) the unaudited financial statements of the Company
included in the Registration Statement and the Prospectus do
not comply in form and in all material respects with the
applicable accounting requirements of the Act and the
related published rules and regulations thereunder adopted
by the Commission or are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
consolidated financial statements included in the
Registration Statement and the Prospectus; and
(B) at a specific date not more than five business days
prior to the date of such letter, (1) there were any changes
in the capital stock or long-term debt of the Company or any
decreases in net current assets or stockholders' equity of
the company, in each case compared with amounts shown on the
June 30, 2000 unaudited balance sheet included in the
Registration Statement and the Prospectus, or (2) for the
period from July 1, 2000 to such specified date there were
any decreases, as compared with the period from July 1, 1999
to the date one year before such specified date, in sales or
net revenues, or any increases as compared with such period
in net loss or total per share amounts of net loss of the
Company, except, in all instances set forth in clauses (1)
and (2) above, for changes, decreases and increases set
forth in such letter;
(iv) they have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts, percentages and
financial information that are derived from the general accounting records of
the Company and are included in the Registration Statement and the Prospectus
under the captions "Prospectus Summary-Summary Financial Information,"
"Capitalization," "Selected Financial Data," and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and elsewhere in the
Prospectus, and have compared such amounts, percentages and financial
information with such records of the Company and with information derived from
such records and have found them to be in agreement, excluding any questions of
legal interpretation;
(v) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim financial
information as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on the unaudited financial statements included in the
Registration Statement; and
(vi) that they have reviewed the Company's system of internal
accounting controls, to the extent they deem necessary in establishing the scope
of their audit of the Company's financial statements as of December 31, 1999,
and that such review did not disclose any weaknesses in internal controls that
they considered to be material weaknesses (the letter addressing this
subparagraph (vi) may be addressed to the Company, provided that it is made
available to the Representatives for use of the Underwriters).
30
In the event that any of the letters referred to above set forth any
such changes, decreases or increases, it shall be a further condition to the
obligations of the Underwriters that: (A) such letters shall be accompanied by a
written explanation of the Company as to the significance thereof, unless the
Representatives deems such explanation unnecessary, and (B) such changes,
decreases or increases do not, in the sole judgment of the Representatives, make
it impractical or inadvisable to proceed with the purchase and delivery of the
Securities as contemplated by the Registration Statement, as amended as of the
date hereof.
References to the Registration Statement and the Prospectus in this
paragraph (g) with respect to either letter referred to above shall include any
amendment or supplement thereto at the date of such letter.
(i) On each Closing Date, there shall have been furnished to you, as
Representatives of the Underwriters, a certificate, dated such Closing Date and
addressed to you, signed by the chief executive officer and by the chief
financial officer of the Company, to the effect that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, in all material respects, as if made
at and as of such Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date.
(ii) No stop order or other order suspending the effectiveness
of the Registration Statement or any amendment thereof or the
qualification of the Securities for offering or sale has been issued,
and no proceeding for that purpose has been instituted or, to the best
of their knowledge, is contemplated by the Commission or any state or
regulatory body.
(iii) The signers of said certificate have carefully examined
the Registration Statement and the Prospectus, and any amendments
thereof or supplements thereto (including any term sheet within the
meaning of Rule 434 of the Rules and Regulations), and (A) such
documents contain all statements and information required to be
included therein, the Registration Statement, or any amendment
thereof, does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented, does not include any untrue
statement of material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading, (B) since the effective date of
the Registration Statement, there has occurred no event required to be
set forth in an amended or supplemented prospectus which has not been
so set forth, (C) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
the Company has not incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, not
in the ordinary course of business, or declared or paid any dividends
or made any distribution of any kind with respect to its capital
31
stock, and except as disclosed or described as to occur in connection
with the offering of the Securities in the Prospectus, there has not
been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of
shares upon the exercise of outstanding options or warrants), or any
material change in the short-term or long-term debt, or any issuance
of options, warrants, convertible securities or other rights to
purchase the capital stock, of the Company, or any material adverse
change or any development involving a prospective material adverse
change (whether or not arising in the ordinary course of business), in
the general affairs, condition (financial or otherwise), business, key
personnel, property, net worth, results of operations or prospects of
the Company, and (D) except as stated in the Registration Statement
and the Prospectus, there is not pending, or, to the knowledge of the
Company, threatened or contemplated, any action, suit or proceeding to
which the Company or any of its subsidiaries is a party before or by
any court or governmental agency, authority or body, or any
arbitrator, which might result in any material adverse change in the
condition (financial or otherwise), business or results of operations
or prospects of the Company.
(j) The Company shall have furnished to you and counsel for the
Underwriters such additional documents, certificates and evidence as you or they
may have reasonably requested.
(k) All necessary filings shall have been made as required and all
filing fees shall have been paid to effect the listing of the Securities on the
Nasdaq National Market.
(l) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain stockholders, officers and directors
---------
of the Company relating to sales and certain other dispositions of shares of
Common Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on each Closing Date.
The several obligations of the Underwriters to purchase Option Shares
hereunder are subject to the delivery to you on the Second Closing Date of such
other documents as you may reasonably request with respect to the good standing
of the Company, the due authorization and issuance of the Option Shares and
other matters relating to the issuance of the Option Shares.
All such opinions, certificates, letters and other documents referred
to hereinabove will be in compliance with the provisions hereof only if they are
satisfactory in form and substance to you and counsel for the Underwriters. The
Company will furnish you with such conformed copies of such opinions,
certificates, letters and other documents as you shall reasonably request.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company, agrees to indemnify and hold harmless each
Underwriter against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may
32
become subject, under the Act or otherwise (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company) insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement made by
the Company in Section 2 of this Agreement;
(ii) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, including the
information deemed to be a part of the Registration Statement at the
time of effectiveness pursuant to Rules 430A and 434(d) of the Rules
and Regulations, if applicable, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto (including any term
sheet within the meaning of Rule 434 of the Rules and Regulations), or
which arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(iii) any untrue statement or alleged untrue statement of any
material fact contained in any audio or visual materials provided by
the Company or based upon written information furnished by or on
behalf of the Company, including, without limitation, slides, videos,
films and tape recordings, used in connection with the marketing of
the securities, including, without limitation, statements communicated
to securities analysts employed by the Underwriters;
and will reimburse each Underwriter for any reasonable legal or other expenses
reasonably incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
such amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you, or by any Underwriter through you,
specifically for use in the preparation thereof.
The Company further agrees to indemnify and hold harmless Xxxxx
Xxxxxxx against any losses, claims, damages or liabilities, joint or several, to
which Xxxxx Xxxxxxx may become subject (including in settlement of any
litigation if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the prospectus wrapper
material prepared by or with the consent of the Company for distribution in
foreign jurisdictions in connection with the Directed Share Program attached to
the Prospectus or any preliminary prospectus, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, when considered in conjunction with
the Prospectus or any applicable preliminary prospectus, not misleading; (ii)
the failure of any Participant to pay for and accept delivery of the shares
which, immediately following the effectiveness of the Registration
33
Statement, were subject to a properly confirmed agreement to purchase; or (iii)
relating to, arising out of, or in connection with the Directed Share Program,
and will reimburse each Underwriter for any reasonable legal or other expenses
reasonably incurred by it in connection with investigating or defending against
such loss, claim, damage, liability or action; provided, that the Company shall
not be responsible under this clause (iii) for any losses, claims, damages or
liabilities (or expenses relating thereto) that are finally judicially
determined to have resulted from the bad faith or gross negligence of Xxxxx
Xxxxxxx.
In addition to their other obligations under this Section 6(a), the
Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
this Section 6(a), they will reimburse each Underwriter on a monthly basis for
all reasonable legal fees or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Company's obligation to reimburse the
Underwriters for such expenses and the possibility that such payments might
later be held to have been improper by a court of competent jurisdiction. To the
extent that any such interim reimbursement payment is so held to have been
improper, the Underwriter that received such payment shall promptly return it to
the party or parties that made such payment, together with interest, compounded
daily, determined on the basis of the prime rate (or other commercial lending
rate for borrowers of the highest credit standing) announced from time to time
by The Wall Street Journal (the "Prime Rate"). Any such interim reimbursement
payments which are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the Prime Rate from the date of such
request. This indemnity agreement shall be in addition to any liabilities which
the Company may otherwise have.
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto (including any term sheet within the meaning of
Rule 434 of the Rules and Regulations), or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by you, or by such Underwriter through you,
specifically for use in the preparation thereof, and will reimburse the Company
for any reasonable legal or other expenses reasonably incurred by the Company in
connection with investigating or defending against any such loss, claim, damage,
liability or action.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b)
34
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such Section, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
the indemnifying party from any liability that it may have to any indemnified
party. In case any such action shall be brought against any indemnified party,
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such Section for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if, in the sole judgment of the
Representatives, it is advisable for the Underwriters to be represented as a
group by separate counsel, the Representatives shall have the right to employ a
single counsel to represent the Representatives and all Underwriters who may be
subject to liability arising from any claim in respect of which indemnity may be
sought by the Underwriters under subsection (a) of this Section 6, in which
event the reasonable fees and expenses of such separate counsel shall be borne
by the indemnifying party or parties and reimbursed to the Underwriters as
incurred (in accordance with the provisions of the second paragraph in
subsection (a) above). Notwithstanding anything contained herein to the
contrary, if indemnity may be sought pursuant to the second full paragraph of
Section 6(a) hereof in respect of such action or proceeding, then in addition to
such separate firm for the indemnified parties, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one separate firm
(in addition to any local counsel) for Xxxxx Xxxxxxx for the defense of any
losses, claims, damages and liabilities arising out of the Directed Share
Program, and all persons, if any, who control Xxxxx Xxxxxxx within the meaning
of the Act. An indemnifying party shall not be obligated under any settlement
agreement relating to any action under this Section 6 to which it has not agreed
in writing.
(d) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above, (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Underwriters on
the other in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or
35
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Underwriters and the parties' relevant intent, knowledge, access to information
and opportunity to correct or prevent such untrue statement or omission. The
Company and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the first sentence of this subsection
(d). The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this subsection (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending against any
action or claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 6 shall be in addition to any liability that the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of the Company (including any person who, with
his consent, is named in the Registration Statement as about to become a
director of the Company), to each officer of the Company who has signed the
Registration Statement and to each person, if any, who controls the Company
within the meaning of the Act.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, and the agreements of the several
Underwriters and the Company contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Underwriter or any controlling person thereof, or the
Company or any of its officers, directors, or controlling persons, and shall
survive delivery of, and payment for, the Securities to and by the Underwriters
hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased does not aggregate
more than 10% of the total amount of Firm Shares set forth in Schedule I hereto,
the remaining Underwriters shall be obligated to take up and pay for
36
(in proportion to their respective underwriting obligations hereunder as set
forth in Schedule I hereto except as may otherwise be determined by you) the
Firm Shares that the withdrawing or defaulting Underwriters agreed but failed to
purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Firm Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Firm Shares in accordance with the
terms hereof, and the amount of Firm Shares not purchased aggregates more than
10% of the total amount of Firm Shares set forth in Schedule I hereto, and
arrangements satisfactory to you for the purchase of such Firm Shares by other
persons are not made within 36 hours thereafter, this Agreement shall terminate.
In the event of any such termination the Company shall not be under any
liability to any Underwriter (except to the extent provided in Section
4(a)(viii) and Section 6 hereof) nor shall any Underwriter (other than an
Underwriter who shall have failed, otherwise than for some reason permitted
under this Agreement, to purchase the amount of Firm Shares agreed by such
Underwriter to be purchased hereunder) be under any liability to the Company
(except to the extent provided in Section 6 hereof).
If Firm Shares to which a default relates are to be purchased by the
non-defaulting Underwriters or by any other party or parties, the
Representatives or the Company shall have the right to postpone the First
Closing Date for not more than seven business days in order that the necessary
changes in the Registration Statement, Prospectus and any other documents, as
well as any other arrangements, may be effected. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 8.
9. EFFECTIVE DATE OF THIS AGREEMENT AND TERMINATION.
(a) This Agreement shall become effective at 10:00 a.m., Eastern
time, on the effective date of the Registration Statement, or at such earlier
time after the effective time of the Registration Statement as you in your
discretion shall first release the Securities for sale to the public; provided,
that if the Registration Statement is effective at the time this Agreement is
executed, this Agreement shall become effective at such time as you in your
discretion shall first release the Securities for sale to the public. For the
purpose of this Section, the Securities shall be deemed to have been released
for sale to the public upon release by you of the publication of a newspaper
advertisement relating thereto or upon release by you of telexes offering the
Securities for sale to securities dealers, whichever shall first occur. By
giving notice as hereinafter specified before the time this Agreement becomes
effective, you, as Representatives of the several Underwriters, or the Company
may prevent this Agreement from becoming effective without liability of any
party to any other party, except that the provisions of Section 4(a)(viii) and
Section 6 hereof shall at all times be effective.
(b) You, as Representatives of the several Underwriters, shall have
the right to terminate this Agreement by giving notice as hereinafter specified
at any time at or prior to the First Closing Date, and the option referred to in
Section 3(b), if exercised, may be cancelled at any time prior to the Second
Closing Date, if (i) the Company shall have failed, refused or been unable, at
or prior to such Closing Date, to perform any agreement on its part to be
performed hereunder, (ii) any other condition of the Underwriters' obligations
hereunder is not fulfilled,
37
(iii) trading in the common stock shall have been suspended by the Commission or
the NASDAQ National Market or trading in securities generally on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ National Market shall
have been wholly suspended, (iv) minimum or maximum prices for trading shall
have been fixed, or maximum ranges for prices for securities shall have been
required, on the New York Stock Exchange or the American Stock Exchange, by such
Exchange or by order of the Commission or any other governmental authority
having jurisdiction, (v) a banking moratorium shall have been declared by
Federal, New York or North Carolina authorities, or (vi) there has occurred any
material adverse change in the financial markets in the United States or an
outbreak of major hostilities (or an escalation thereof) in which the United
States is involved, a declaration of war by Congress, any other substantial
national or international calamity or any other event or occurrence of a similar
character shall have occurred since the execution of this Agreement that, in
your judgment, makes it impractical or inadvisable to proceed with the
completion of the sale of and payment for the Securities. Any such termination
shall be without liability of any party to any other party except that the
provisions of Section 4(a)(viii) and Section 6 hereof shall at all times be
effective.
(c) If you elect to prevent this Agreement from becoming effective or
to terminate this Agreement as provided in this Section, the Company shall be
notified promptly by you by telephone or telegram, confirmed by letter. If the
Company elects to prevent this Agreement from becoming effective, you shall be
notified by the Company by telephone or telegram, confirmed by letter.
10. DEFAULT BY THE COMPANY. If the Company shall fail at the First
Closing Date to sell and deliver the number of Securities which it is obligated
to sell hereunder, then this Agreement shall terminate without any liability on
the part of any non-defaulting party.
No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of such default.
11. INFORMATION FURNISHED BY UNDERWRITERS. The statements set forth
in the third paragraph of text under the caption "Underwriting" concerning the
terms of the offering by the Underwriters, (ii) the seventh paragraph of the
text under the caption "Underwriting" concerning the terms of the offering by
the Underwriters, and (iii) the eighth paragraph of the text under the caption
"Underwriting" concerning stabilization and over-allotment in any Preliminary
Prospectus and in the Prospectus constitute the written information furnished by
or on behalf of the Underwriters referred to in Section 2 and Section 6 hereof.
12. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters, shall
be mailed, telegraphed or delivered to the Representatives c/o U.S. Bancorp
Xxxxx Xxxxxxx, Xxxxx Xxxxxxx Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000, except that notices given to an Underwriter pursuant to Section
6 hereof shall be sent to such Underwriter at the address stated in the
Underwriters' Questionnaire furnished by such Underwriter in connection with
this offering; if to the Company, shall be mailed, telegraphed or delivered to
it at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000,
Attention: Xxxx X. Xxxxxxxxx; or to such other address as the person to be
notified may have requested in writing. All notices given by telegram shall be
promptly confirmed by letter. Any party to this Agreement may change such
38
address for notices by sending to the parties to this Agreement written notice
of a new address for such purpose.
13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 6. Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained. The term "successors and assigns" as herein used shall not
include any purchaser, as such purchaser, of any of the Securities from any of
the several Underwriters.
14. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Minnesota.
[Signature Page Follows]
39
Please sign and return to the Company the enclosed duplicates of this
letter whereupon this letter will become a binding agreement between the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
POZEN INC.
By ______________________________________
Xxxx X. Xxxxxxxxx
President and Chief Executive Officer
Confirmed as of the date first
above mentioned, on behalf of
themselves and the other several
Underwriters named in Schedule I
hereto:
U.S. BANCORP XXXXX XXXXXXX INC.
PRUDENTIAL SECURITIES INCORPORATED
PACIFIC GROWTH EQUITIES, INC.
By: U.S. BANCORP XXXXX XXXXXXX
By:________________________________
Name:
Title:
40
SCHEDULE I
UNDERWRITER NUMBER OF FIRM SHARES (1)
----------- -------------------------
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Prudential Securities Incorporated
Pacific Growth Equities, Inc.
---------
Total................. 5,000,000
=========
____________
(1) The Underwriters may purchase up to an additional 750,000 Option Shares, to
the extent the option described in Section 3(b) of the Agreement is
exercised, in the proportions and in the manner described in the Agreement.
41
EXHIBIT A
---------
Form of "Lockup" Agreement
[NAME OF SHAREHOLDER]
_________, 2000
U.S. Bancorp Xxxxx Xxxxxxx Inc.
Prudential Vector Healthcare Group
Pacific Growth Equities
c/o U.S. Bancorp Xxxxx Xxxxxxx
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned understands that U.S. Bancorp Xxxxx Xxxxxxx Inc.
("Xxxxx Xxxxxxx"), together with some or all of Prudential Vector Healthcare
Group and Pacific Growth Equities, propose to enter into an Underwriting
Agreement (the "Underwriting Agreement") with Pozen Inc., a Delaware corporation
(the "Company"), providing for the initial public offering (the "Public
Offering") by the several Underwriters, including Xxxxx Xxxxxxx (the
"Underwriters"), of shares of the Common Stock, $0.001 par value per share, of
the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 180 days after the date of the final prospectus
relating to the Public Offering (the "Prospectus"), (1) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock (including without limitation any shares of preferred stock of the
Company convertible or exchangeable for Common Stock) or (2) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. In addition, the
undersigned agrees that, without the prior written consent of Xxxxx Xxxxxxx on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the Prospectus, make any
demand for or exercise any right with respect to, the registration of any shares
of Common Stock or any security convertible into or exercisable or exchangeable
for Common Stock.
Whether or not the Public Offering actually occurs depends on a number
of
42
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
Very truly yours,
_____________________________
(Name)
_____________________________
_____________________________
_____________________________
(Address)
43
